Penske May Bid on Saturn

Automotive entrepreneur Roger Penske, who helped launch the Smart car in the U.S., has emerged as a possible bidder for GM's Saturn brand.

By Philip Nussel of AutoWeek

The Saturn Sky Red Line is one of the brand's crown jewels.

Race team owner and automotive entrepreneur Roger Penske is a possible bidder for General Motors' Saturn brand, The Wall Street Journal reported this evening on its Web site, citing people familiar with the situation.

A Penske spokesman declined to comment, the Journal said.

Penske is CEO of suburban Detroit-based Penske Automotive Group, which ranks No. 2 behind AutoNation Inc.on the Automotive News list of the top 125 U.S. auto retailer groups with 2008 new vehicle sales of 171,872. The company, with 149 dealerships representing 40 brands, is due to report its first quarter earnings on Tuesday.

Penske last year helped launch Mercedes-Benz' smart brand of micro cars as its national distributor in the U.S.

He has a variety of other holdings throughout the U.S. auto industry, including truck leasing, logistics and auto racing. In 1988, he acquired the money-losing Detroit Diesel Corp. from General Motors and turned around the iconic heavy-duty engine maker in less than four years. He sold the company to DaimlerChrysler AG in 2000.

GM said earlier today it has a number of potential buyers for its Saturn brand and retail network and will look to secure an agreement with a specific buyer later this year.

GM retained S.J. Girsky & Co as an adviser to help it review expressions of interest from the potential buyers.

GM, which has taken $15.4 billion of U.S. government loans to operate since the start of the year, has scrambled to unload underperforming brands, including Saturn and Hummer, as part of a sweeping restructuring mandated by the U.S. government.

GM said it is proceeding with efforts to sell Saturn after receiving interest from several parties.

The announcement comes as GM faces a June 1 deadline to convince the U.S. autos task force overseeing its restructuring that it has a viable business plan. The automaker is racing to get concessionary deals from its bondholders and union and sell assets.

Last month, an investor group that includes private equity firm Black Oak Partners LLC and some Saturn dealers said it has approached GM about buying the assets of the Saturn brand and distribution network.

A GM spokesman described the potential bid as "very interesting."

GM has confirmed it had been in discussions with Black Oak and said there were other investment groups interested in taking over Saturn, a struggling brand GM launched 25 years ago in a failed bid to head off market gains by Japanese imports.

Saturn brand sales dropped 22 percent in 2008, worse than the 18 percent decline in the overall market.

Flash Drive: 2009 Dodge Journey SXT AWD

By Staff of MSN Autos

Dodge Journey SXT
A little late to the party, the Journey is Dodge's first entry into the busy crossover market. With a modern interpretation of the classic Dodge styling cues, such as the familiar cross-hair grille, the Journey is a good-looking vehicle. Inside, there are a number of unique stowage ideas, from the chilled glove box designed to hold water bottles or soda cans to the secret cubby under the front passenger seat. Seats are comfortable, and there is plenty of room in the rear seat and the cargo areas. Seating for seven is available, however our tester did not have the optional third row. The ride is quite smooth, but the soft suspension makes the Journey mushy when cornering or swerving suddenly. While our tester had the largest engine option — the 235-horse V6 — I found power lacking in most situations, especially when tackling hills. Unfortunately, the lack of power was not made up for with good fuel economy — the best I could achieve was an indicated 18 mpg with mostly highway driving. Not a bad vehicle, but in such a tight market, not bad just isn't good enough. –Perry Stern

The Dodge Journey is functional people mover. It can carry up to seven people, or you can stow the seats flat and create lots of room in the back. It is easy to move the seats around to get in and out quickly. If you are a fan of lots of storage space and cupholders, the Journey has you covered. There is even a beverage cooler in the glove box, which is a neat feature for road trips. Around town, I was able to generate only 19 mpg in mixed driving. Also, it would be nice if steering-wheel controls for the audio system were available on the base version of the car. The Journey can get the job done, but don't be surprised to see the price reach $30K if you check off some of the seating and entertainment options. –Joe Chulick

I've never liked the term "crossover" to describe cars. I suppose a crossover is a compromise between an SUV and a minivan (itself a compromise between a car and a van). Dodge invented the minivan, and the new Dodge Journey is more minivan than crossover. Unlike a minivan, the Journey doesn't have sliding doors. It does have plenty of storage bins throughout, though, even under the front passenger seat. The Journey looks better than most minivans, and is more fun to drive, too. It achieved more than 18 mpg in city driving for me. I like the Dodge Journey, and it seems my neighbors do, too, as I see more and more of them in driveways around my town. –Paul Hagger

Some Lenders Object to Chrysler Sale

A minority group of Chrysler LLC secured lenders says the U.S. Treasury is forcing a Fiat merger that favors junior creditors over senior creditors.
By David Barkholz of AutoWeek


2009 Chrysler 300

A minority group of Chrysler LLC secured lenders has objected in bankruptcy court to the quick sale of Chrysler to a new corporate entity led by Fiat S.p.A.

The group of about 40 banks and hedge funds holds about $3 billion of the $6.9 billion in secured loans that Chrysler has with the banks. Four major New York banks holding $4 billion of that debt agreed last week to settle for $2 billion in payment for the $6.9 billion owed.

Attorney Peter V. Pantaleo representing JP Morgan Chase Bank, said 90 percent of all secured lenders signed a letter in support of a Fiat hook up before the bankruptcy. But not all followed through to sign onto the settlement agreement. JP Morgan Chase is the lead bank among the New York banks settling for $2 billion.

But the dissident lenders, led by Oppenheimer Funds and Stairway Capital, contend the proposed sale of Chrysler assets favors junior creditors over senior creditors and seeks to improperly channel consideration to specific creditor groups.

The dissenting secured lenders said in their objection that the sale was being "orchestrated entirely by (the U.S.) Treasury and foisted upon the debtors without regard to corporate formalities."

Chrysler's new corporate entity, led by Fiat and its proposed 20 percent stake, would be considered the lead bidder for Chrysler's assets in a bankruptcy court auction.

The automaker asked U.S. Bankruptcy Judge Arthur Gonzalez to set a hearing as soon as May 21 to approve a $2 billion sale of most of its assets out of bankruptcy that would clear the way for a merger with Fiat, according to documents filed with the court.

The court has set a May 15 deadline for competing bids, according to Bloomberg News.

Chrysler also asked the court to approve a $35 million breakup fee for Fiat if the sale falls apart.

Chrysler filed for Chapter 11 bankruptcy protection Thursday to try to complete an alliance with Fiat and qualify for about $6 billion in additional federal loans.

President Obama scolded the dissident lenders in an address Friday Thursday for preventing an out-of-court settlement of Chrysler restructuring.

Fiat would start with a 20 percent stake in the new Chrysler, which would grow quickly to 35 percent.

Fiat CEO Sergio Marchionne is expected to run the merged operations.